Gold prices inched up from the previous session's four-month low on Wednesday, as a dollar rally relented and equities softened. Spot gold was up 0.1 percent at $1,270.60 per ounce by 0948 GMT, after hitting its lowest price since the end of last year at $1,265.90 in the last session.
US gold futures were 0.1 percent lower at $1,272.40 an ounce. "The recent weakness in gold has had more to do with a strong US dollar. The dollar rally we saw on Tuesday did not continue today and that's why gold looks constructive this morning," ABN AMRO analyst Georgette Boele said.
"The crucial level for gold prices come at the 200-day moving average around $1,250. As long as that level holds, gold prices will be moving up." Gold prices have fallen about 6 percent from a peak in February as the dollar firmed and global equities ticked up, with some of the risks of a global growth slowdown fading.
The US is expected to beat analysts' estimates of a 2.1 percent rate of growth with the Atlanta Federal Reserve's GDPNow model projecting between 2.2 to 3.4 percent. Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, on Tuesday fell 0.3 percent to 749.63 tonnes, the lowest since Oct. 23.
SPDR Gold holdings have dipped about 5 percent so far this year, reflecting bearish investor sentiment. Spot gold may hover above support at $1,264 per ounce or bounce towards a resistance at $1,284, Reuters technical analyst Wang Tao said.
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